Amazon Sets Up in Kentuckiana for Quick Delivery

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While online retailer Amazon prepares to open a major distribution center in Southern Indiana, some say the company could soon begin offering customers in the Louisville region same-day delivery.

Until recently, Amazon has avoided charging sales tax to customers in many states where it had no physical presence. Now, the company has given into that fight and has made deals in states like Indiana to begin charging that tax in the next couple years.

Slate Magazine's Farhad Manjoo has written a column explaining why Amazon gave up its fight against charging sales tax. The company, he said, has invested millions of dollars to build warehouses in largely populated areas. The investment in Indiana includes $150 million and over 1,000 jobs by 2015.

The warehouses being built are now in more populated regions, said Manjoo.

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“Now they’re building stuff that’s right next to you. Its going to get to you much faster, in exchange you’re essentially going to have to pay the sales tax on your items where in the past you wouldn’t have,” said Manjoo.

But Manjoo argues customers are more likely to pay a fee for larger items for the convenience of quick delivery. The adaptation of Amazon's business model may give large box stores nearby these new warehouses reason to be concerned, he said.

“They think they’ll be competitive with physical retailers who also have to charge you sales tax because its going to be vastly more convenient to order something and then get it later that day or the next day,” said Manjoo.

Amazon’s Jeffersonville distribution center is expected to be open this fall.